ISPs should pay copyright costs: AFACT

The Australian Federation Against Copyright Theft (AFACT) has said that New Zealand's decision to impose a NZ$25 charge on rights holders who want internet service providers to process user copyright infringement notices is not the ideal answer to tackling the copyright problems.

In April, New Zealand passed the Copyright (Infringing File Sharing) Bill, which allows copyright owners to send evidence of alleged infringements to internet service providers (ISPs), who will then send up to three infringement notices to the account holder.

If the alleged offending continues, the copyright owner can take a claim to the Copyright Tribunal, which can fine the account holder up to NZ$15,000.

The Bill gives the district court the power to suspend an internet account for up to six months, in appropriate circumstances. However, this is not intended to be used unless the notice process and the remedies by the Copyright Tribunal are ineffective. The Bill comes into effect 1 September.

A NZ$25 charge has been set, which rights holders will have to pay if they want an ISP to deal with an infringing user. When a claim is taken to the Copyright Tribunal, the fee is NZ$200.

New Zealand Commerce Minister Simon Power pointed out that the fee was more cost effective than going through the courts, allowing rights holders to pursue a "reasonable number" of copyright infringements to "educate internet users" while making sure that ISPs weren't inundated with breaches to follow up.

However, AFACT, which fights piracy in Australia on behalf of film and television studios, wasn't in favour of the charge.

It pointed to the recent agreement between ISPs and rights holders in the US as an example of how an agreement should be laid out.

"AFACT notes the New Zealand Government's approach of a rights holder fee per notice, which is out of step with the more common and preferred practice in other jurisdictions where right holders and ISPs bear their own respective costs," AFACT said in a statement.

"For example, we note that in last week's voluntary agreement in the United States between the movie and music industry and the country's largest ISPs that each party agreed to bear their own costs."

AFACT has recently been trying to get Australian ISPs to act on their users who are allegedly infringing copyright, recently sending a letter to providers saying that they should act, or expect action. Although it lost its appeal in the Federal Court where it tried to show that iiNet had authorised its users to infringe copyright, lawyers have said that the judgement provides a legal avenue for the federation to have providers aid rights holders in policing copyright infringement.

iiNet and the Internet Industry Association have been asked to comment on the charge, but had not responded at the time of publication.

NZ's Power said that the NZ copyright charge would be reconsidered when the three strikes law comes into effect.

The Telecommunications User Association of New Zealand chief executive Paul Brislen said in a blog that the number was a good compromise between the NZ$40 charge ISPs wanted and the NZ$2 fee the rights holders were hoping for.

He said that users and corporate firms should be able to make sure that nobody used their account to download copyrighted material, but said that small businesses and those offering free Wi-Fi services would find this a challenge. Brislen expressed concern that the number of free Wi-Fi services could decrease as a result.

He also worried that ISPs would pass on any extra costs to provide the infringement services to customers.

Labour Communications and IT spokesperson Clare Curran echoed that worry, saying that the government looked to have underestimated the processing costs of the law.

"While the costs of processing alleged copyright infringements have, to some extent, been recognised with the decision to charge rights holders — predominantly US movie studios and record labels — up to NZ$25, ISPs estimate the cost could actually be as high as NZ$56 per notice," she said in a statement.

"And that doesn't include indirect costs or the cost to establish a new or upgraded system to process infringement notices."

She said it was likely that there would be a flood of notices when the law came into force on 1 September.

"Estimating the cost for affected rights holders is not straightforward. The government suggests there will be up to 500 cases of infringement taken to the Copyright Tribunal in a year, yet previous estimates put the figure closer to 5000 per month per ISP."